Host Card Emulation (HCE) is topic of season in the contactless world. It is an disruptive technology which promises to open up new business cases and challenge the incumbent Secure Element (SE) technology. It is redefining mobile payment, access control and identification use-cases.
Host Card Emulation is an enabler technology, which allows NFC enabled mobile device to emulate any contactless smart card and store the secure data remotely on the cloud. Traditionally the user data was only stored inside a mobile device, popularly known as Secure Element Platforms.
HCE allows users to just tap their mobile devices on the terminals to initiate transactions with an app of their choice. HCE will allow Telcos and Banks to quickly launch contactless mobile services.
HCE is a game-changer due to the following reasons:
Quick Launch To Market: HCE is a software based solution and hence quicker to launch and market. The hardware based solution – Secure Element – is a time consuming process as the roll-out is dependent on ensuring SE on Mobile SIM card or embedded Secure Element.
Cost-Effective: HCE wallets are like any other apps. So there is no cost of special devices with secure element or additional memory cards or fobs. It is cheaper for banks and other service providers to launch these wallets.
Versatile: HCE Apps can be versatile. It can be used for various services including Payments, tokens/loyalty programs, access control, transit ticketing, and other value added services alike.
Secure: Tokenisation and key rotation ensure the HCE solutions are secure. More work is being done to ensure higher security levels. HCE is a new technology and it will get better with each season.
Industry-Support: Visa and MasterCard support HCE. It is a big endorsement. The HCE support comes pre-packaged in Android Kitkat OS. Blackberry was the first OS to support HCE. HCE works with NFC enabled devices.
The HCE ecosystem ensures easy implementation, quick scalability and fast roll-outs. Indeed the steps in the right direction for the mobile payment industry. The best part is the opening up of new use-cases and business scenarios that are so vital for the cloud-driven mobile-first digital lives.